Understanding Kenya’s Small Claims Court: A New Twist on Costs in Settled Cases
A High Court ruling in Mombasa sparked conversation on how costs are handled in Kenya’s Small Claims Court. What got people talking is how it could change how minor disputes are settled.
We’re going to break it down in this post.
What’s the Small Claims Court, Anyway?
The Small Claims Court is a special court set up under the Small Claims Court Act of 2016, that’s designed to handle minor disputes quickly and affordably.
Think of it like a fast-track lane for cases involving up to one million Kenyan shillings; things like unpaid bills, small business disagreements, or minor personal disputes.
The idea is to make justice accessible, especially for people who can’t afford lengthy, expensive court battles. It’s less formal, easier to navigate, and doesn’t stick to the strict rules of bigger courts.
The Ruling
In December 2023, Justice Magare of the High Court in Mombasa decided in a case involving General Accident Insurance Company Limited and a minor, represented by their mother.
This ruling dives into Section 33 of the Small Claims Court Act. This section talks about who gets to claim costs (like legal fees or other expenses) after a case ends—and here’s the twist: Justice Magare said that if a case ends because it’s settled or struck out (meaning it’s removed from the court’s list for some reason), there’s no “successful party.” And if there’s no successful party, no one gets costs.
This might sound technical, but think of it this way: imagine you and a friend argue over a small loan, and you take it to the Small Claims Court. Before the judge decides, you both agree to settle—maybe you agree to split the difference. Under this ruling, neither of you can ask the court to cover your costs, like the time or money you spent on the case because the case didn’t have a clear winner or loser.
Why Does This Matter?
You might wonder, “So what? Why should I care?”
For one, it might push people to be more careful about settling cases. If you know you won’t get your costs back, you might think twice before agreeing to a settlement or letting a case get struck out.
It could also make lawyers rethink their strategies—some might push harder for a formal win in court rather than a quiet settlement.
On the flip side, this ruling fits with the Small Claims Court’s original goal of keeping things simple and cost-effective. The court was created to help regular people resolve disputes without breaking the bank, and not awarding costs in settled cases keeps things straightforward. But for some, it feels unfair—especially if you’ve spent time and money on a case that didn’t go to a full trial.
What the Experts Are Saying
Mixed reactions noted say that this ruling might disappoint some lawyers who were used to recovering costs after settlements. While others pointed out that traditionally, costs were often included in settlement agreements—suggesting this could shake things up.
While the ruling makes sense in keeping the SCC simple, it’s stirring up debate among legal pros. They’re whether it’ll stick as courts handle more cases.
Looking Ahead: What This Means for You
This ruling is something to keep in mind.
It’s a reminder to be clear about costs when you settle—maybe include them in your agreement if you can. And if you’re working with a lawyer, ask them how this might affect your case.
Whether you’re a business owner, a freelancer, or just someone trying to resolve a neighborly spat, understanding these changes can help you navigate the system with confidence.
Disclaimer: This article is for informational purposes only and does not constitute legal advice. If you need specific legal guidance, talk or chat on 0708111222.